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Troops Escape Financial Trends, Enjoy Money Management Benefits

By Lisa DanielAmerican Forces Press Service

WASHINGTON, Dec. 23, 2008  Soldiers, sailors, airmen and Marines are relatively insulated from the financial disasters affecting many Americans, and increasingly are taking advantage of programs designed to promote what military leaders call “financial readiness,” military financial counselors say.

All the services offer free financial counseling to servicemembers on installations, and troops and their spouses increasingly are using the services even while few are reporting mortgage foreclosures or spousal job losses that are increasing in the civilian sector.

The Navy provided financial counseling to 237,000 sailors and their spouses at 70 installations this year, increasing by 51 percent their outreach to sailors and their outreach to spouses by 100 percent, said Patricia Johnson, who oversees the Navy’s personal financial management programs.

“It’s not that they’re having more problems,” Johnson said. “But people are more concerned.” Only 4 percent of 1,300 sailors surveyed in May said they felt “in over their heads” with personal finances, she said.

Johnson credits the Navy financial programs with helping sailors feel confident. “We feel that our robust program that we have in the Navy … and what our financial educators and [counselors] do in the field help these numbers stay down.”

Some Army installations also are seeing an increase in soldiers seeking financial help. Lynn Olavarria, manager of the financial readiness program at Fort Bragg, N.C., said her group sees about 400 soldiers and spouses per month.

“We’re getting a few more every year,” she said. “I think that’s more awareness.”

With a steady paycheck, good benefits and a lower rate of home ownership, troops enjoy some buffers to financial instability. “I think the services that are available to military people make it a very desirable place during a recession, more so than in the private sector,” Johnson said.

Still, servicemembers began experiencing the same price increases earlier this year -- when gasoline spiked to more than $4 per gallon -- as everyone else.

“In the commissaries, there was an increase in prices just like in the private sector,” said Mike Hire, director of the Navy-Marine Corps Relief Society on Camp Pendleton, Calif. “Things are cheaper overall [than on the economy], but they did get more expensive.”

Hire said he expected to see fewer people when gas prices dipped this fall to less than half of the price in early summer, but they’ve sought help in about the same numbers.

“A lot of our military members have been using credit cards to get by, and now they’re trying to get down some of that credit card debt, just like the general public,” he said. “That’s where we’re seeing that extra gas money going.”

The military and its support organizations have unveiled several programs in the past year and a half to promote personal financial stability with the understanding that financial hardships can pose a distraction to military missions. Some of the programs include:

-- “Financial Readiness Challenge” events at installations around the country sponsored by the Defense Department’s military community and family policy office and scheduled through February;

-- Dave Ramsey’s Financial Peace University, Military Edition, provided by chaplains at some Army installations;

-- The Military Saves campaign to promote financial savings among servicemembers; and

-- Quick-assistance loans from the service relief societies, which provide grants and no-interest loans.

Service officials say they are being proactive in offering services to combat problems specific to servicemembers.

“The biggest thing we have with the economy is soldiers worried that their civilian landlords will go bust,” Army spokesman Paul Boyce said. Staff judge advocate offices on installations are working with soldiers to create the best rental contracts based on state laws, Boyce said.

Another issue for servicemembers is being the target of financial scams -- a problem that has gotten so bad that Arizona state Attorney General Terry Goddard recently created an advisory board to stop it.

Predatory lending also has been a problem, but seems to be decreasing through educational outreach to servicemembers and passage of a federal law last year to curb it, officials said.

The Navy-Marine Corps Relief Society helped to disperse $1.1 million to sailors after they sought high-interest commercial loans last year, John Alexander, vice president and chief communications officer at the society’s headquarters, said. That amount was down to $250,000 in the first three quarters of this year, he said.

Sailors and Marines were seeking the high-interest or “payday” loans because “it was just too easy,” Alexander said. The society had been sitting down with each servicemember and asking questions and providing counseling, he explained, and the commercial lenders “didn’t ask you anything.”

As an alternative to payday loans, the society started its “quick-assistance” loans of up to $300 for which applicants do not have to see a financial counselor, Alexander said. The society’s requests for assistance are up 39 percent over last year because of the popularity of the quick-assistance loans, he said.

Like servicemembers, the relief societies also report faring better than their civilian-sector counterparts. None report a significant decrease in donations, although investment values are down, causing some decrease in nonoperating fund expenditures. Army Emergency Relief will decrease its annual allocation for scholarships next year from $10 million to $8 million to reflect the loss on investments, retired Army Col. Dennis Spiegel, deputy director for administration for AER, said.

“Like everyone else, we won’t be able to make up that shortfall in investments,” Spiegel said.